Pensions freedoms encourage saving

14% of people are saving more into their pension pot as a direct result of the pension freedoms.

Introduced in 2015, the pensions freedoms gave people greater choice over how they access their savings.

According to research by Aegon, people have saved on average £50,000 in pensions, up from £29,000 in April 2015.

Out of 2,000 people surveyed, 15% said they need to plan more for retirement, up from 10% in April 2016.

The number of people not reviewing their pension plans has also fallen to 32% with a further 22% having reviewed their pension plans in the last 6 months.

Overall expectations for retirement income have become realistic. The average annual income people want in retirement is £32,000, compared to £38,000 last year.

However despite the positive signs:

36% have never engaged with their pension savings

22% don’t understand how to review their retirement plans

15% said a lack of online services and information prevents them from checking on their savings.

Steven Cameron, pensions director at Aegon, said:

“Two years on and all the signs point to the pension freedoms having paved the way for a smoother road to retirement. People have moved up a gear, saving more and becoming more engaged with their pensions.

“However, there’s still a long way to go. People will need to accelerate their saving to reach their retirement destination and make the UK a nation of long term savers.”